Cross-brand referrals as a customer acquisition strategy: how brand loyalty shapes consumer response

A significant challenge facing online startup brands is the increasing cost of customer acquisition through conventional digital advertising channels. As brands seek more cost-effective alternatives, a collaborative marketing strategy has emerged in which one brand incorporates promotional content from another brand into its customer-facing marketing emails. This study examined how consumers respond to such brand-to-brand referrals relative to two established promotional approaches: paid social media advertising and personal referrals from close friends. The study also investigated whether consumers’ loyalty toward the referring brand influences their attitudes and behavioral intentions toward the referred brand, given that brand loyalty can shape how consumers interpret and respond to brand communications. A one-way between-subjects experiment was conducted across four conditions: a personal referral, a referral from a brand toward which the consumer had high loyalty, a referral from a brand toward which the consumer had low loyalty, and paid social media marketing. The results indicated that referrals from high-loyalty brands were as effective as personal referrals from close friends. By contrast, referrals from low-loyalty brands produced outcomes comparable to those generated by paid social media marketing. These findings demonstrate that brand-to-brand email referrals can offer online startups a potentially effective, low-cost customer acquisition strategy, particularly when the referring brand has established a strong relationship with its customers.